Preparing Investor Documents

Investors need to have a clear idea of a company’s financial position and outlook before they are able to make any investment decisions — and that doesn’t stop once their investment has been procured. Investors generally receive a document on a quarterly or monthly basis regarding the performance of their investment. This includes a balance sheet, together with income and expense reports, and cash flow statements. Investors need to know not only what the current financial situation of a business is but also how the business plans to maintain its operations, expand, and meet any challenges. Having reliable, relevant and current financial records is critical to the process which is why helping management achieve this is a key component of our Transaction Advisory Services.

Creating a Comprehensive Business Plan

A business plan is a summation of your company’s current status and its plans for the future. This should include any relevant marketing research, demographics studies, and advertising strategies that are relevant to your company’s continued growth. Organizations may have plans for customer outreach, acquisition, and retention, or brand awareness and management — all of this follows under the purview of the business plan. Your business plan should be able to address all risks and opportunities of the business. Investors view business plans as a road map of the Company’s future; comprehensive and articulate business plans instill confidence in the company’s management.

Assemble Your Financial Documents

Your income and expense reports, balance sheets, and general ledger provide a basis for preparing investor reports that focus on matters that investors need to know including a full accounting of where their funds have been used and how the company is performing. These documents are best assembled through thorough, careful accounting for transactions on a timely basis. Financial documents must adhere to Generally Accepted Accounting Principles; this makes them easier to read and understandable even to international investors, in addition to improving their reliability and accuracy. Financial documents should never be “fixed” on-the-fly; any errors discovered on the documents should be addressed within the books themselves and substantiated.

Develop an Investor’s Summary

Your investors may or may not have time to read your full set of financial statements. An investor’s executive summary will give an overview of the business plan and associated financial documents, paring out the core concerns for the investors and detailing the most important aspects of the investor’s documents. An investor’s summary serves as both a consolidation and a conclusion, condensing all of the vital information in the report for easier review.

It’s always a good idea to have your books reviewed by an accountant who understands the requirements of the investors before you submit your documents to investors. Hogg, Shain & Scheck can help you prepare for your next round of investment funding, by ensuring that your financial statements adhere to Generally Accepted Accounting Principles and are as reliable and relevant as possible for any future and current investors.

Please contact us for more information regarding preparing investor documents.